Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Apr 2512:30 AM EDT
-01:30 AM EDT
At one point, she believed GMAT wasn’t for her. After scoring 595, self-doubt crept in and she questioned her potential. But instead of quitting, she made the right strategic changes. The result? A remarkable comeback to 695. Check out how Saakshi did it.
Apr 2601:30 AM EDT
-02:30 AM EDT
Learn how Keshav, a Chartered Accountant, scored an impressive 705 on GMAT in just 30 days with GMATWhiz's expert guidance. In this video, he shares preparation tips and strategies that worked for him, including the mock, time management, and more.
Apr 2610:00 AM EDT
-11:00 AM EDT
The Target Test Prep course represents a quantum leap forward in GMAT preparation, a radical reinterpretation of the way that students should study. Try before you buy with a 5-day, full-access trial of the course for FREE!
Apr 2711:00 AM EDT
-12:00 PM EDT
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors
Apr 2808:00 AM PDT
-11:00 AM PDT
Whether you are just beginning your MBA journey or fine-tuning your path to a 700+ score, GMAT Day is designed to give you a competitive edge.
May 0111:00 AM PDT
-12:00 PM PDT
Free- full-length test + 15 concept videos + 150+ short videos + study plan!
15 Jan 2025, 12:12
Kudos
Bookmarks
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
55%
(hard)
Question Stats:
67% (02:03) correct
33%
(02:08)
wrong
based on 254
sessions
History
Date
Time
Result
Not Attempted Yet
The new Axis Starlight, Axis Auto’s flagship electric-gas hybrid automobile, is considered so efficient by Axis that the company plans to se l the Starlight to consumers for no payment other than the difference between what the consumer paid for gasoline for the past three years of driving their previous vehicle and what they will pay for gasoline while driving the Starlight for the next three years. Consumers will make an initial down payment, and then pay any remaining fees after fuel costs have been assessed at the end of the three year period.
Which of the following, if true, would most significantly disadvantage Axis Auto based on their proposed payment system?
(A) Most drivers own only one automobile.
(B) Other car manufacturers are planning to introduce similar fuel-efficient vehicles.
(C) Drivers interested in the Starlight tend to drive significantly more miles annually than the average driver.
(D) The price of gasoline is expected to rise dramatically over the next three years.
(E) The annual amount spent on gasoline by drivers can be accurately determined based on the number of miles driven in a specific make of automobile.
Which of the following, if true, would most significantly disadvantage Axis Auto based on their proposed payment system?
(A) Most drivers own only one automobile.
(B) Other car manufacturers are planning to introduce similar fuel-efficient vehicles.
(C) Drivers interested in the Starlight tend to drive significantly more miles annually than the average driver.
(D) The price of gasoline is expected to rise dramatically over the next three years.
(E) The annual amount spent on gasoline by drivers can be accurately determined based on the number of miles driven in a specific make of automobile.
22 Mar 2025, 22:58
Kudos
Bookmarks
wasario
Break down the passage:
- Price: Price of gasoline for last three years driving previous vehicle - price of gasoline for next three years driving the new flagship vehicle
- Axis auto assumes that price of gasoline for next three years driving their flagship vehicle will be less because they believe their electric hybrid is fuel efficient
- But what if the cost to run the Starlight (due to rising gas prices, changed driving habits, etc.) ends up being closer to what the old car cost—or even more?
- If that's the case, Axis could end up paying more than they expect to pay, hurting them financially
(A) Most drivers own only one automobile.
This does not directly affect the difference in fuel costs—whether someone owns one car or two does not change how much gas they used with their old car versus what they will use with the new Starlight.
(B) Other car manufacturers are planning to introduce similar fuel-efficient vehicles.
While increased competition can be a disadvantage, it does not directly undercut the payment scheme based on the difference in fuel costs. It simply means there are alternatives on the market.
(C) Drivers interested in the Starlight tend to drive significantly more miles annually than the average driver.
If a driver covers more miles, the old car would have consumed a lot of fuel, and the new car—though more efficient—would also burn more overall. Typically, a greater difference in gallons consumed (old vs. new) increases the difference in cost, which helps Axis collect more, not less.
(D) The price of gasoline is expected to rise dramatically over the next three years.
This undermines Axis’s payment structure. If future gas prices rise sharply, even though the Starlight is more fuel-efficient, the total the consumer pays for gas during the next three years could be nearly as high (or higher) than the amount paid for the old car’s gas at lower prices. That reduces or even eliminates the “difference” that the buyer would owe, and so Axis receives little or no payment for the car. This directly damages Axis’s financial return.
(E) The annual amount spent on gasoline by drivers can be accurately determined based on the number of miles driven in a specific make of automobile.
Far from harming Axis, this accuracy in calculating fuel costs helps Axis administer its plan (they can reliably figure out the difference). It does not represent a drawback to the payment system.
25 Sep 2025, 22:30
Kudos
Bookmarks
Why Not Option (C):
Drivers interested in the Starlight tend to drive significantly more miles annually than the average driver.
High-mileage drivers typically spent more on gasoline with their old cars.
They will also spend more on gasoline with the Starlight, but because the Starlight is more efficient, the difference between old-car fuel cost and new-car fuel cost is likely large.
A large difference actually benefits Axis — it increases the amount Axis can charge under their formula.
Unless the Starlight’s fuel use increases nearly in proportion to the old car’s (which is unlikely if it’s very efficient), high-mileage customers increase Axis’s revenue, not hurt it.
Drivers interested in the Starlight tend to drive significantly more miles annually than the average driver.
High-mileage drivers typically spent more on gasoline with their old cars.
They will also spend more on gasoline with the Starlight, but because the Starlight is more efficient, the difference between old-car fuel cost and new-car fuel cost is likely large.
A large difference actually benefits Axis — it increases the amount Axis can charge under their formula.
Unless the Starlight’s fuel use increases nearly in proportion to the old car’s (which is unlikely if it’s very efficient), high-mileage customers increase Axis’s revenue, not hurt it.
